The euro was trading near six-week highs against the dollar on Wednesday as sentiment on the dollar was hit by doubts over whether the Federal Reserve will start to reduce stimulus measures at next week’s policy meeting.
EUR/USD edged up 0.04% to 1.3766 during late Asian trade, holding just below Tuesday’s high of 1.3794, the strongest level since October 29.
The pair was likely to find support at 1.3700 and resistance at 1.3831, the high of October 25 and a two year high.
The dollar remained under pressure amid expectations that the Federal Reserve will hold off on tapering its USD85 billion-a-month asset purchase program at its upcoming policy meeting scheduled for December 17-18, despite last week’s stronger-than-forecast U.S. nonfarm payrolls report.
Demand for the shared currency continued to be underpinned as expectations for further monetary easing by the European Central Bank dimmed after the bank held back from fresh rate cuts at last week’s policy meeting.
The euro received an additional boost after European Union finance ministers moved closer to an agreement on a European banking union on Tuesday, a measure which is seen as key in fending off a repeat of the region’s financial crisis.
The euro eased back from five-year peaks against the yen, with EUR/JPY slipping 0.22% to 141.21, after rising as high as 142.15 on Tuesday, the highest level since October 2008.
Elsewhere, the dollar was lower against the yen, with USD/JPY down 0.27% to 102.56 from 102.83 on Tuesday.
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